Genesis part-sale in 'next month or so' confirmed

The Government has confirmed its plans to sell down its
holding in Genesis Energy ''in the next month or so'' with
more details coming tomorrow, Prime Minister John Key says.

Speaking at his weekly post-Cabinet press conference, Mr Key
confirmed the Government's intention to sell 49% of Genesis,
saying the details would come in Finance Minister Bill
English's speech to the Auckland Chamber of Commerce
tomorrow.

The Genesis part-sale is expected to raise between $700
million and $1 billion.

Milford Asset Management analyst William Curtayne said
Genesis represented a different investment opportunity from
Mighty River Power and Meridian Energy and should not be
written off.

The generation assets of Genesis included the coal- and
gas-fired Huntly thermal power station, hydro-electricity
schemes in Tekapo, Tongariro and Waikaremoana, a small wind
farm in South Wairarapa and a 31% stake in the Kupe gas field
off the coast of Taranaki.

Genesis also had the largest customer base of the listed
generation-retailers (gentailers).

''The key difference between Genesis and the other two IPOs
is its exposure to thermal energy. Meridian is largely a
hydro generator with a small exposure to wind while Mighty
River is a mix of hydro and geothermal generation.

"The thermal exposure allows Genesis to manage changes in
prices and demand in a different nature to the other two
newly listed gentailers.''

Last week Genesis reported a 23% fall in first-half earnings
to $150.5 million, reflecting stiff retail competition and a
warm winter, which meant hydro storage was above average and
wholesale prices were lower.

Mr Curtayne said signs suggested Genesis was well prepared
and was already acting like a listed company.

Management announced at its recent half-year result the
company had undertaken a reprofiling of its coal contracts
and signalled the maintenance work on its Tekapo canal was
near completion.

Additionally, debt taken on to fund the acquisition of the
Tekapo hydro scheme had been paid down to a sustainable
level.